(continuing): “The real underlying currency of our world is narrative, and the ability to control it….

George Kurtz is one clear example today of narrative control’s central role in the maintenance and expansion of existing power structures, as well as an illustration of how the empire is wired to reward those who advance pro-empire narratives and punish those who damage them; just compare how he’s doing to how Julian Assange is doing, for example.

*In a new interview with The Canary, UN Special Rapporteur on torture Nils Melzer explicitly named the mass media as largely responsible for Assange’s psychological torture, excoriating them for the way that they “have shown a remarkable lack of critical independence and have contributed significantly to spreading abusive and deliberately distorted narratives about Mr Assange.”

*In a new essay called “Freeing Julian Assange”, journalist Suzie Dawson reports that “Countless articles appear to have been obliterated from the internet” about Assange and WikiLeaks, amounting to some 90 percent of the links Dawson examined which were shared in tweets by or about WikiLeaks and Assange since 2010.

*I just finished reading this excellent Swiss Propaganda Research essay about the little-known fact that “most of the international news coverage in Western media is provided by only three global news agencies based in New York, London and Paris.”…

Because whoever controls the narrative controls the world….

Freedom and democracy only exist within the western empire to the extent that it keeps up appearances….

Comment: Forget about US voters and elections-they’re meaningless. We learned that US taxpayers are born into slavery to the US Mass Murder and Starvation Machine. How can US monsters be stopped? Answer: Break up the US into parts, for example SW states joining Mexico. The US War Machine will never stop any other way.

Shares of Crowdstrike soared 70% during trading Wednesday, finishing at $58 a share and giving the company a reported market capitalization of $11 billion. Kurtz owns just about 10% of the company—though some of his shares are pledged as security for a loan, according to the company’s filing with the Securities & Exchange Commission. After discounting a portion of the pledged shares, Forbes calculates that Kurtz, 48 years old, is worth just over $1 billion.

[Ed. note: What “Russian hacks?” The US government says it never examined the DNC computers for whatever reason. No one but Crowdstrike has ever examined them. Crowdstrike’s opinion is not sufficient in a case involving millions of taxpayer dollars. We’ve been given no evidence that emails from DNC or Podesta computers were obtained via “hacking” or that “Russians,” were involved.]

(continuing): “Customers include [the FBI, the Republican Congressional Committee] payment processor ADP, web-hosting company Rackspace and Tribune Media.Alperovitch is not listed as a shareholder in the company’s SEC filing.

Prior to cofounding Crowdstrike, Kurtz held executive roles, including worldwide chief of technology, at security firm McAfee. Back in 1999, Kurtz founded a security technology firm called Foundstone Inc. He has a B.S. in accounting from Seton Hall University.

“CrowdStrike (CRWD), provider of cloud-based cybersecurity, is expected to IPO on Wednesday, June 12. At a price range of $28-$30 per share, the company plans to sell up to $540 million with an expected market cap of ~$5.7 billion. At the midpoint of the IPO price range, CRWD currently earns an unattractive rating.

[Ed. note: As the Forbes author knows, in a case involving the US government and millions of taxpayer dollars, we’re told no one but Crowdstrike ever examined the DNC computers. Obviously, the author’s link to the CrowdStrike website doesn’t provide readers with substantiation that the DNC was “hacked” or that “Russia” did it. The US government says it never examined the DNC computers for whatever reason. Fine. That doesn’t change the fact that CrowdStrike’s original claim and its posting of links to subsequent “independent” articles are proof of nothing.]

(continuing): “and it boasts 44 members of the Fortune 100, including Amazon Web Services (AMZN) as customers. On the other hand, the company has significant losses and will need to grow rapidly to justify an expected market cap that is almost 23 times 2018 revenue.

However, CRWD spends a lot of money to acquire these customers. In fiscal year 2019 (which ended on January 31), the company spent $173 million (69% of revenue) on sales and marketing. As a result, the company’s net operating loss after tax (NOPAT) increased by 11%, from -$95 million in 2018 to -$106 million in 2019. See Figure 1.

Figure 1: CRWD Revenue and NOPAT: 2017-2018

CRWD Revenue & NOPAT, NEW CONSTRUCTS, LLC

Encouragingly, sales and marketing costs declined as a percent of revenue, down from 88% in 2018. CRWD will need to keep growing revenue faster that marketing costs in order to achieve profitability.

Even in this crowded field, CRWD has managed to stand out.Gartner Peer Insights recognizes the company as the highest-rated vendor for Endpoint Detection and Response Solutions based on customer reviews.

In addition, CRWD’s customer retention rate backs up its high level of customer satisfaction. CRWD measures customer retention in two ways: Gross Retention and Net Retention. Gross Retention measures the year-over-year loss of customers, while Net Retention measures the year-over-year change in total spending from existing customers. Figure 2 shows that both Gross and Net Retention rates are high and increasing.

Figure 2: CRWD Dollar-Based Gross and Net Retention: Q4 2017- Q4 2019

CRWD Customer Retention, NEW CONSTRUCTS, LLC

“CRWD’s Gross Retention rate of 98% in Q4 means it lost just 2% of customers year-over-year. For comparison, competitor Carbon Black had an 87% retention rate last year. Meanwhile, CRWD’s Net Retention rate of 147% means it grew revenue by 47% year-over-year in Q4 before even factoring in the revenue from new customers acquired during the year.”

CRWD’s superior retention explains how it managed to grow revenue by 110% last year while Carbon Black grew revenue by just 30%. The two companies started the year with a similar level of revenue and spent similar amounts on marketing, but CRWD is retaining and attracting customers at a much higher rate.

Building a Moat Around Data

The bull case for CRWD rests on the assumption that the company can leverage big data to turn its current leadership position in the industry into a self-reinforcing cycle. As CRWD attracts new customers based on its superior service, it gets more data with which to train its AI, which makes its system even better, which attracts even more customers, and the cycle continues.

At the same time, many of CRWD’s competitors are significantly larger and have a major resource advantage. If CRWD can’t turn its data into a real competitive advantage, it may struggle to stay ahead of competitors that can afford to spend significantly more on R&D.

In order to justify the midpoint of its IPO range, $29/share, CRWD must grow revenue by 40% compounded annually for 10 years and achieve NOPAT margins of 10%, the same as Fortinet (FTNT) in 2018, the most profitable cybersecurity company we cover. See the math behind this dynamic DCF scenario.

In this scenario, CRWD would earn $7 billion in revenue in 2029, about ~30% of its projected addressable market.

Overall, the expectations implied by CRWD’s valuation are high but not as impossibly high as I’ve seen with other IPOs. The current valuation presents significant downside risk if the company fails to maintain its leading position in the market.

Income Statement: I made $38 million of adjustments, with a net effect of removing $30 million in non-operating expense (12% of revenue). You can see all the adjustments made to CRWD’s income statement here.

Balance Sheet: I made $70 million of adjustments to calculate invested capital with a net decrease of $26 million. You can see all the adjustments made to CRWD’s balance sheet here.

Valuation: I made $461 million of adjustments with a net effect of decreasing shareholder value by $461 million. Our largest adjustment is $439 million (8% of market cap) in employee stock option liabilities. You can see all the adjustments made to CRWD’s valuation here.

Disclosure: David Trainer, Kyle Guske II, and Sam McBride receive no compensation to write about any specific stock, style, or theme.